Inclusive expansion in production in the next years needs to prioritise labour-intensive and globally sought-after products. Pursuing this goal requires effort, but not much in the way of new ingenuity as the country is already on this trajectory.
It is encouraging to note that about two-thirds of the 880,000 primary agricultural jobs in the third quarter of 2019 were in horticulture and field crops, which are labour-intensive agricultural subsectors.
The top-value agricultural exports over the past five years were also within the horticulture and field crop subsectors. These were citrus, wine, table grapes, apples and pears, maize, wool, nuts, sugar, fruit juices and animal feed products. They accounted for 52% of the average $9.5bn worth of annual agricultural exports between 2014 and 2018.
Some may ask if there has been growth in the exports of these products over the past five years, or they have stagnated, which would warrant a shift in focus. Aside from wine, apple and pear exports, most products registered a notable uptick in export revenues over the past five years.
The expansion of these industries should not mainly be in traditional agricultural provinces such as the Western Cape, the Free State or Mpumalanga, but rather in former homeland areas
The contraction in wine, apple and pear export values has not been caused by softer global demand. Rather, it is because of lower domestic production in the case of wine and flat output in apples, both because of unfavourable weather conditions in the Western Cape. As about 80% of SA’s apple production is in this province, the drought and its spillover effects have had a severe negative effect on apple output. The same is true for wine, as 93% of SA’s production is in the Western Cape.
Other agricultural products that are still relatively small in terms of export value, but with higher growth rates over the past five years, are figs, pineapples, avocados, guavas, mangoes, strawberries, raspberries, blackberries, black, white or red currants, gooseberries and beef. These are also labour-intensive products and their expansion would be in line with SA’s broad agriculture vision since they provide much-needed support to poor communities.
The expansion of these industries should not mainly be in traditional agricultural provinces such as the Western Cape, the Free State or Mpumalanga, but rather in former homeland areas (KwaZulu-Natal, the Eastern Cape and Limpopo). It is within these areas that increased agricultural activity would have a comparatively greater effect on communities. Investments under this initiative should be guided by agro-ecological endowment and land-governance precepts.
Attached to the aforementioned top 10 exported agricultural products are a few value-added ones, aside from wine, fruit juices, animal feeds and sugar. To attain the 1-million potential agricultural jobs mentioned in chapter six of the National Development Plan, the value chains of these industries need to mature regarding agroprocessing.
Underutilised land
A deliberate effort is needed to expand export markets, specifically on the African continent. SA’s relatively more developed agricultural value chains provide an advantage to pursue this goal. The department of trade, industry & competition is drafting an agroprocessing masterplan, which will serve the industry best if it focuses on processing for the domestic and export markets.
The current trajectory of agricultural production is in line with the broader vision of growing SA’s agriculture sector in export-led and labour-intensive industries. What is now essential is ensuring that provinces with underutilised land are also part of this broader agricultural development plan and investment in processing facilities is made in situ.
This requires a common vision for development among government, community and traditional leaders and businesses. In this, land governance will be central in guiding essential investment to drive expansion in production and concomitant socioeconomic benefits.
• Sihlobo (@WandileSihlobo) is head of economic and agribusiness research at the Agricultural Business Chamber.
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